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GlaxoSmithKline PLC  (NYSE:GSK) E10: $2.49 (As of Sep. 2017)

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

GlaxoSmithKline PLC's adjusted earnings per share data for the three months ended in Sep. 2017 was $0.656. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $2.49 for the trailing ten years ended in Sep. 2017.

As of today, GlaxoSmithKline PLC's current stock price is $34.81. GlaxoSmithKline PLC's E10 for the quarter that ended in Sep. 2017 was $2.49. GlaxoSmithKline PLC's Shiller PE Ratio of today is 13.98.

During the past 13 years, the highest Shiller PE Ratio of GlaxoSmithKline PLC was 20.00. The lowest was 11.57. And the median was 15.10.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

GlaxoSmithKline PLC Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.03 3.18 2.86 2.97 2.29

GlaxoSmithKline PLC Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.49 2.29 2.36 2.40 2.49

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today's Shiller P/E ratio of a stock, we use today’s price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Let's use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned $1 a share in 2001, then the 2001's equivalent earnings in 2010 is $1.4 a share. If Wal-Mart earns $1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is $1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, GlaxoSmithKline PLC's adjusted earnings per share data for the three months ended in Sep. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Sep. 2017 (Change)*Current CPI (Sep. 2017)
=0.656/246.819*246.819
=0.656

Current CPI (Sep. 2017) = 246.819.

GlaxoSmithKline PLC Quarterly Data

per share eps CPI Adj_EPS
200712 0.821 210.036 0.964
200803 0.968 213.528 1.119
200806 0.959 218.815 1.081
200809 0.719 218.783 0.812
200812 0.577 210.228 0.677
200903 0.629 212.709 0.730
200906 0.920 215.693 1.053
200909 0.852 215.969 0.973
200912 1.032 215.949 1.180
201003 0.786 217.631 0.892
201006 -0.177 217.965 -0.201
201009 0.783 218.439 0.885
201012 -0.424 219.179 -0.478
201103 0.956 223.467 1.056
201106 0.700 225.722 0.766
201109 0.858 226.889 0.933
201112 0.741 225.672 0.811
201203 0.823 229.392 0.885
201206 0.768 229.478 0.826
201209 0.716 231.407 0.764
201212 0.562 229.601 0.604
201303 0.591 232.773 0.627
201306 0.657 233.504 0.695
201309 0.625 234.149 0.659
201312 1.646 233.049 1.743
201403 0.455 236.293 0.475
201406 0.453 238.343 0.470
201409 0.267 238.031 0.277
201412 0.670 234.812 0.704
201503 4.975 236.119 5.200
201506 0.097 238.638 0.100
201509 0.337 237.945 0.350
201512 -0.234 236.525 -0.244
201603 0.165 238.132 0.171
201606 -0.256 241.018 -0.262
201609 0.434 241.428 0.443
201612 0.130 241.432 0.133
201703 0.526 243.801 0.532
201706 -0.095 244.955 -0.095
201709 0.656 246.819 0.656

Add all the adjusted EPS together and divide 10 will get our e10.


Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller PE Ratio can seem to be too high even the actual P/E is low.

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

GlaxoSmithKline PLC's Shiller P/E Ratio of today is calculated as

Shiller PE Ratio=Share Price/E10
=34.81/2.49
=13.98

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

During the past 13 years, the highest Shiller P/E Ratio of GlaxoSmithKline PLC was 20.00. The lowest was 11.57. And the median was 15.10.


Be Aware

Shiller PE Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.


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